What Do Hedge Funds Think of Colfax Corp (CFX)?

As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Colfax Corp (NYSE:CFX) in this article.

Is Colfax Corp (NYSE:CFX) a buy, sell, or hold? Money managers are becoming hopeful. The number of bullish hedge fund positions advanced by 3 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CPFL Energia S.A. (ADR) (NYSE:CPL), EPAM Systems Inc (NYSE:EPAM), and BankUnited (NYSE:BKU) to gather more data points.

According to most stock holders, hedge funds are perceived as unimportant, old financial vehicles of years past. While there are over an 8000 funds in operation today, We look at the bigwigs of this club, about 700 funds. These investment experts orchestrate the majority of the hedge fund industry’s total capital, and by observing their top investments, Insider Monkey has deciphered a number of investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Now, we’re going to check out the recent action regarding Colfax Corp (NYSE:CFX).

Hedge fund activity in Colfax Corp (NYSE:CFX)

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Charles Akre’s Akre Capital Management has the number one position in Colfax Corp (NYSE:CFX), worth close to $210.3 million, amounting to 4.9% of its total 13F portfolio. On Akre Capital Management’s heels is Bares Capital Management, led by Brian Bares, holding a $159.4 million position; 15.8% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions encompass Jonathan Auerbach’s Hound Partners, Tom Gayner’s Markel Gayner Asset Management and Murray Stahl’s Horizon Asset Management.

Consequently, key money managers have jumped into Colfax Corp (NYSE:CFX) headfirst. Millennium Management, managed by Israel Englander, initiated the largest position in Colfax Corp (NYSE:CFX). Millennium Management had $5.2 million invested in the company at the end of the quarter. James A. Noonan’s Pivot Point Capital also initiated a $4.2 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Peter Muller’s PDT Partners, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s go over hedge fund activity in other stocks similar to Colfax Corp (NYSE:CFX). These stocks are CPFL Energia S.A. (ADR) (NYSE:CPL), EPAM Systems Inc (NYSE:EPAM), BankUnited (NYSE:BKU), and Tenet Healthcare Corp (NYSE:THC). This group of stocks’ market caps match CFX’s market cap.

As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $459 million. That figure was $759 million in CFX’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand CPFL Energia S.A. (ADR) (NYSE:CPL) is the least popular one with only 6 bullish hedge fund positions. Colfax Corp (NYSE:CFX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard THC might be a better candidate to consider a long position.